Caesars mulls split
Caesars Entertainment is considering spinning off its digital assets, including its eponymously named sportsbook, into a separate, publicly traded entity.
current corporate structure is “undervaluing its digital properties”
Speaking Tuesday on an investors call, CEO Tom Reeg stated Caesars’ current corporate structure is “undervaluing its digital properties.”
Assets currently under the entertainment giant’s digital division include its sportsbook, iCasino products, and its newly formed in-house gaming studio.
Reeg believes assets under Caesars Digital are valued less than they should be because they’re grouped with the parent firm’s retail casino business.
Breaking it down
According to Sportico, Caesars Digital posted $1.16bn in net revenue in 2024. The figure represents 10% of Caesar’s entire net revenue, up 2% from 2023.
Caesars Digital adjusted earnings before EBITDA climbed from $38m to $117m year-over-year. Reeg said that should this digital growth continue and “market dynamics remain the same,” then it was time to act.
“You should expect that we would look at any and all avenues in terms of how we can drive the most value.”
Like the majority of US sportsbooks, Caesars took a battering over the 2024 NFL season with results favoring bettors. Reeg reported that, however, Caesar’s Digital saw a 60% growth in iGaming net revenue for 2024 which offset the sportsbook-related performance.
Despite news of the potential public spinoff, Caesars’ stock price “remained flat after-hours Tuesday night.”
Falling behind on sports
Caesars’ move to spin off its digital operations is of strategic interest, considering the rising strength of its iCasino vertical against its shrinking sports betting market share.
neck-and-neck with Fanatics”
FanDuel and DraftKings now preside over 70% of the US’s legal online sportsbook handle. Caesars Sportsbook is behind third-place BetMGM, and according to Legal Sports Report, “is now neck-and-neck with Fanatics.”